topic Re: Is it worth opening up a couple lines of credit now? in Understanding FICO® Scoringhttp://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653954#M66907
<P>Welcome to the forums! &nbsp;I'd suggest two things in addition to illecs' most excellent advice:</P><P>&nbsp;</P><P>1) You want to establish multiple tradelines as soon as possible. &nbsp;2-3 revolving tradelines (credit cards for this discussion) is generally considered optimal both from what's been reported here, and also in my own personal experience as well. &nbsp;3 is possibly marginally better than 2, but it's in no way required. &nbsp;That said a swing of 3 months isn't going to hurt you at all in a few years anyway.</P><P>&nbsp;</P><P>2) Inquiries are pretty minimal as far as penalties go; it is never recommended to continually apply for credit cards (or other loan types as well) but that doesn't sound like the case here. &nbsp;While you won't have a FICO score for another few months, if you plan to shop at a particular store during Christmas and the rewards for the card are meaningful as compared to paying in cash, I'd probably take the shot anyway. &nbsp;Alternatively I'd apply for something like BOFA's student rewards as that has their standard 1-2-3 rewards package on it, which is a pretty good every day card, and is designed for folks in your specific situation.</P><P>&nbsp;</P>Sun, 21 Oct 2012 01:11:21 GMTRevelate2012-10-21T01:11:21ZIs it worth opening up a couple lines of credit now?http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653866#M66904
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; About three months ago, I opened up my first line of credit in a Citibank student credit card. I've made all my payments on time and am seeking new lines of credit to build on my credit score. I understand that it's not recommended that someone who just opened their first CC go and apply for more within the first six months, but here's my thinking:</P><P>&nbsp;</P><UL><LI>I want to apply for a Gap card and Express store card because I shop/work there and want to get rewarded.</LI><LI>I don't want to wait a few more months because holiday season is coming up, and I have many purchases planned at these stores.</LI><LI>The increase in credit limit will help with my utilization, maybe not now, but eventually?</LI><LI>I plan on opening more accounts in the distant future. So, why not build my average account age by starting up some accounts now? If I were to open up a new credit card in 4-5 years, it won't lower my average account age as much.</LI><LI>I plan on making all payments on time/in full, and keeping the utilization ratio under 30%.</LI></UL><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Credit Karma simulator predicted a 60 point decrease in credit score even though I'm opening up a new line of credit and haven't had any hard inquiries. My friend who has had a credit card for about three years saw an increase in credit score. This makes it seem like the reason I would take such a hit is because of my avg/oldest account age. So, some questions I have:</P><P>&nbsp;</P><OL><LI>Why is the hit on my credit score so big for just an additional line of credit? Is it because I would be signing up for another credit card within 6 months?</LI><LI>Would this impact chances of getting the cards themselves? (Credit Karma currently predicts my score at 729)</LI><LI>If I were to take the credit score hit, how long would it be before I'd be able to recover my score again? Is the credit score hit a very temporary thing for people signing up for too many cards too soon? Or, is there going to be permanent/long-term damage for my decision to sign up for two more cards after only three months of my first?</LI><LI>Ultimately, what is the right decision here?</LI></OL>Sat, 20 Oct 2012 23:05:23 GMThttp://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653866#M66904dr_stan32012-10-20T23:05:23ZRe: Is it worth opening up a couple lines of credit now?http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653924#M66905
<P>Welcome!</P><P>&nbsp;</P><P>I agree that a 2nd CC would help but your FICO score would not increase that much. The scores offered by CreditKarma are not FICO scores. Ignore their scores.</P><P>&nbsp;</P><P>If I had what you had, I'd wait until the other is 6 months old before applying for one more. Your odds will dramatically improve. If you only have this one CC, you don't have a FICO score yet and the odds of being denied are higher before it turns 6 months.</P><P>&nbsp;</P><P>Don't apply for a card to carry balances on it. That can be dangerous. In other words, if you are looking to buy stuff at these stores, stick with cash if you don't have a store card by then. You'll find yourself wanting to apply for more store cards for the sake of ringing up balances on them.&nbsp;</P><P>&nbsp;</P><P>For best results per FICO, pay all cards to $0 except one and get the one under 9% util. 30% util will ding you quite a bit.</P><P>&nbsp;</P><P>&nbsp;</P>Sun, 21 Oct 2012 00:32:32 GMThttp://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653924#M66905llecs2012-10-21T00:32:32ZRe: Is it worth opening up a couple lines of credit now?http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653954#M66907
<P>Welcome to the forums! &nbsp;I'd suggest two things in addition to illecs' most excellent advice:</P><P>&nbsp;</P><P>1) You want to establish multiple tradelines as soon as possible. &nbsp;2-3 revolving tradelines (credit cards for this discussion) is generally considered optimal both from what's been reported here, and also in my own personal experience as well. &nbsp;3 is possibly marginally better than 2, but it's in no way required. &nbsp;That said a swing of 3 months isn't going to hurt you at all in a few years anyway.</P><P>&nbsp;</P><P>2) Inquiries are pretty minimal as far as penalties go; it is never recommended to continually apply for credit cards (or other loan types as well) but that doesn't sound like the case here. &nbsp;While you won't have a FICO score for another few months, if you plan to shop at a particular store during Christmas and the rewards for the card are meaningful as compared to paying in cash, I'd probably take the shot anyway. &nbsp;Alternatively I'd apply for something like BOFA's student rewards as that has their standard 1-2-3 rewards package on it, which is a pretty good every day card, and is designed for folks in your specific situation.</P><P>&nbsp;</P>Sun, 21 Oct 2012 01:11:21 GMThttp://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1653954#M66907Revelate2012-10-21T01:11:21ZRe: Is it worth opening up a couple lines of credit now?http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1654116#M66911
<P>I appreciate the replies! I suppose I should try to figure out my chances of getting accepted by either card.</P>Sun, 21 Oct 2012 03:47:20 GMThttp://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Is-it-worth-opening-up-a-couple-lines-of-credit-now/m-p/1654116#M66911dr_stan32012-10-21T03:47:20Z